It’s Open Enrollment, Now What?
When I worked at Google, every October I got a very official email from HR announcing “Open Enrollment.” I knew it was important, but it was also just another email in the sea of emails. Attempting inbox zero at a major tech company requires a heroic effort…..if you know, you know.
So, each year I would flag the email to review later…. and then the deadline popped back up out of nowhere. And I scrambled.
If you’re also feeling lost (or short on time), read on. My hope is that after the next 5 minutes you’ll feel a lot more prepared.
What is Open Enrollment and why does it matter?
As a reminder, open enrollment is the one time per year you can change your health insurance and other benefits with your employer. After open enrollment, you can’t make benefits changes until next year (unless you experience a qualifying event) or leave for another company.
Why does open enrollment matter? On average, your company benefits are probably equal to 15-30% of your salary. The exact amount depends on your salary and industry. I estimate that Google paid at least $17,310/year in benefits on my behalf (not including 401K match!) when I was an employee. This was just the cost of ongoing insurance and wellness programs they provided. For the nosey among you (and let’s face it, we’re all nosey), I will break this down in a future blog post.
Your guide to Open Enrollment
Many of you are likely navigating open enrollment as we speak.
Consider double-checking these things:
Health insurance: Do you expect any major health events that you can predict this year? (e.g. having a baby, major surgery, etc). Are you appropriately covered? If you have minimal healthcare needs, do you want to opt into a high-deductible health plan that will allow you to have a HSA? HSAs are triple tax advantaged accounts and are a bit of a “holy grail” in the FIRE (Financial Independence, Retire Early) community.
Relatedly: HSA or FSA: Some employers may offer one or the other. To be eligible for a Health Savings Account (HSA), you need to also be on a high-deductible healthcare plan. High deductible health care plans tend to be great for healthy people, with low health care needs. If you have pre-existing conditions which require regular, ongoing care or medication, you’ll need to do the math to see what makes sense. You can keep the money in your HSA forever, but FSA plans are use-it or lose-it. Both allow you to use pre-tax money to pay for health-related expenses. If you have children, see if your employer offers a Dependent Care FSA, which is a tax-advantaged way to pay for childcare. Keep in mind that Dependent Care FSAs are also use-it or lose-it.
Dental / vision insurance: Does your employer provide these? Does the coverage make sense for you? Do you anticipate any major events this year (e.g. major dental work?)
Mental health: Does your employer offer any benefits for your mental wellness? Do you need to opt-in? Is this covered via your regular health insurance or is it a separate benefit?
Life insurance: Some employers provide a small amount of group term insurance coverage by default. Is this enough for you? Like everything in personal finance, it depends. I know – your favorite thing to hear 😬
As a reminder, insurance is to protect yourself against a major life event that could have an outsized negative impact on your family. Insurance should not be confused with investment products. How do you know if you need life insurance? Consider this - does anyone depend on you for their survival (e.g. kids, older parents, a spouse, relatives, etc)? If you were to unexpectedly pass away, would these people have a hard time financially (e.g. to pay the mortgage, pay for your kids’ needs, etc)? If yes, then make sure you have sufficient term life insurance. If you’re single and don’t have any children, or if your spouse works as well, you probably don’t need as much insurance. You may want to consider shopping for insurance outside your employer. You can read more here.
Disability insurance: People often focus on life insurance, but it’s far more likely that you will become disabled than die (cryptic, I know!) Does your employer offer disability insurance? This is especially important when you have a specialized job that you’ve received detailed training for (e.g. think about the impact if a surgeon was in a major car accident and lost use of their hands. The result could be millions of dollars of lost wages, and potentially no way to pay back thousands in student loans). If you need more disability insurance than your employer provides, consider looking elsewhere. NerdWallet has a good breakdown of what to consider here.
Legal benefit: Does your employer offer a group legal program? Sometimes employers will allow you to pay an annual fee to gain access to discounted legal support. This could be beneficial if you need to create estate documents, want to draft a prenup or postnup, or need other legal support. Look into the terms at your employer, as plans vary.
Other reimbursement: Does your employer offer any support for professional development? This likely is outside the scope of open enrollment, but it’s good to be aware of. For example, many of my Build Your Future Wallet students get full or partial reimbursement from their employer for completing the educational 10 week program!
Open Enrollment is just the beginning
Your employer likely offers you other benefits outside of the official enrollment period as well. Once you get these above benefits in place, make sure to go check with HR / consult the relevant internal documentation. Some common examples:
401K/403B match
Paid sick/PTO leave
Parental Leave (Maternity/Paternity/Adoption)
Transportation benefits (I’ve seen free, discounted, or the ability to contribute pre-tax to pay for public transportation)
Professional development / leadership / education / tuition reimbursement
Free financial coaching
Gym access / fitness memberships or other wellness benefits
Mental health benefits, including access to therapy/mental health providers or to apps, like Calm or Headspace
Product or service discounts (e.g. 30% Bose products, 20% off Core Power membership, etc)
Free or discounted access to museums or events
Ability to take a sabbatical after a given period of employment
What other benefits does your employer offer? Or are you feeling shocked seeing some of the benefits listed above? Consider creating a petition to ask your employer for new benefits.
I spent the early part of my career in the nonprofit sector where benefits were sparse. I get if you’re feeling left out. Not every company has generous policies, but it never hurts to ask!
Beth Williams is the Founder of Future Wallet, where she helps millennial women break free from the grind of their careers and use their money to craft a better life.
Beth has a MBA from the UC Berkeley Haas School of Business and has been featured in the Washington Post. She’s worked with hundreds of millennial women at companies such as Google, BCG, Intuit, Meta, Spotify, Sephora, and Disney. You can find Beth dancing Cuban salsa when she’s not nerding out about compound interest.
